Netflix is finally getting serious nigh offering customers a cheaper, advertizement-supported subscription tier.
Speaking during a recent earnings call interview, company CEO Reed Hastings revealed that the
is at present “quite open” to shaking upward its business concern model in an effort to both drive acquirement and create the choice of lower prices for new and existing subscribers.
The access comes after Netflix posted quarterly subscriber losses for the first time in a decade. Since the start of 2022, the streamer says it has lost 200,000 paying customers – a figure expected to rise to 2 million come the finish of June.
Netflix therefore believes the introduction of an advertizing-supported subscription tier, akin to those already offered on rival platforms like
HBO Max, could help cease the haemorrhage – despite the company’s long-continuing aversion to subscription-based advertising.
“Those who have followed Netflix accept known that I’one thousand against the complexity of advertizement and I’m a big fan of the simplicity of subscriptions,” Hastings told investors. “Simply as much as I’m a fan of that, I’m a bigger fan of consumer option and allowing consumers who would like to have a lower toll and are advertisement tolerant get what they desire makes a lot of sense.”
As for when Netflix might introduce this new subscription tier, Hastings said: “[It’south] something nosotros’re looking at at present. Nosotros’re trying to figure it out over the side by side year or two, simply think of u.s. as quite open to offering fifty-fifty lower prices with advertising equally a consumer selection.”
Hastings besides cited competing streamers past name in his justification for the motility.
HBO launched an advertisement-supported subscription tier
on HBO Max last year, while Disney is planning on
introducing a similar plan
later in 2022.
“It’southward pretty clear that [this model] is working for Hulu,” the Netflix CEO said. “Disney’south doing it. HBO did it. I don’t think we have a lot of doubtfulness that it works. All those companies have figured it out, I’thousand sure we’ll simply get in and effigy it out every bit opposed to [testing] it and peradventure [doing] information technology or not [doing] it.”
It’southward non yet clear how much Netflix’s advertisement-supported subscription tier might cost, nor the parameters this more affordable package could place on the availability of content, though HBO’s model provides a useful blueprint (for prospective customers, every bit well as Netflix itself).
For $9.99 (around £eight / AU$14) per month, subscribers to the ad-supported version of HBO Max can admission the same library of movies and Television shows as those on the standard tier, admitting without the ability to download content for offline viewing or stream it in higher quality than 1080p.
There’due south been no official word however on how much Disney’s equivalent tier will cost, though we’d conceptualize similar parameters placed on the content available to subscribers.
Analysis: a long time coming
This isn’t the starting time time Netflix has flirted with the idea of introducing an advert-supported subscription tier on its still market-leading streaming service.
Every bit recently as March, company CFO Spencer Neumann
admitted that he could “never say never”
when asked about the possibility, though he did clarify at the time that the move is “not something in [Netflix’s] plans right at present.”
“It’s hard for the states to ignore that others are doing it,” Neumann told investors, “simply for now information technology doesn’t make sense for united states of america.”
In low-cal of those same quarterly loss figures, though, Netflix appears to have inverse its tune on the matter. The streaming giant’s share price barbarous close to twenty% following news of its 200,000-subscriber bleeding, prompting a very public need for immediate action.
Only Netflix intends to address its losses through other means, also. “Our plan is to re-accelerate our viewing and revenue growth by continuing to better all aspects of Netflix – in particular, the quality of our programming and recommendations, which is what our members value most,” CEO Hastings told investors.
Before in 2022, the streamer as well
unveiled a airplane pilot programme
that may before long add a $2.99 (around £two.50 / AU$four) surcharge to Netflix accounts sharing their credentials exterior the main household. At the visitor’s recent earnings briefing, it
doubled down on that appetite, revealing that 100 million-plus households beyond the globe are currently flouting the monthly subscription fee.
Depending on your tolerance for ads and account-sharing, then, Netflix is either about to go much cheaper or slightly more expensive – the choice, ultimately, will be upwards to you lot.
- Check out our selection of six nifty streaming shows may accept missed so far in 2022